BANKRUPTCY FRAUD

http://www.washingtonpost.com/business/economy/shepherd-preyed-on-his-flock/2012/08/02/gJQATGOoRX_story.html

Shepherd preyed on his flock

By Michelle Singletary, Thursday, August 2, 10:52 AM

A Maryland minister who used parishioners to finance his luxury lifestyle was recently sentenced to 27 months in prison and ordered to pay more than $630,000 to four church members who took out loans on behalf of the pastor to purchase cars and a mansion.

Prosecutors said Robert J. Freeman, 56, hid church assets to avoid paying hundreds of thousands of dollars in debts. He pleaded guilty to obstructing bankruptcy court proceedings.

In 2005, Freeman filed for bankruptcy protection claiming he was broke. But it turns out the pastor was hiding the fact that he was living in a $1.75 million, 9,000 square-foot home bought with funds from church members, reported The Washington Post’s Ann E. Marimow and Hamil Harris.

Freeman also failed to disclose that he also had received 11 luxury vehicles worth more than $1 million, also in the names of church members. Freeman served as pastor and leader of Save the Seed Ministry, Inc., Save the Seed International Church, and Seed Faith International Church.

Rod J. Rosenstein, U.S. States Attorney for the District of Maryland, said Freeman “lived a life of fraud and deception, using millions of dollars from church members and fraudulently obtained credit to pay for luxury cars and a mansion while falsely representing in court that he was indigent.”

“The essence of this crime was taking advantage of unwitting people,” District Judge Roger W. Titus said before he sentenced Freeman.

Here’s the Color of Money Question of the Week: What do you think when you hear stories of pastors preying on their parishioners? Send your comments to colorofmoney@washpost.com. Put “Shepherd Preyed On His Flock” in the subject line. Please include your name, city and state.

Retirement Reservations

Two recent surveys and an opinion piece in the New York Times might have you wondering if individual investors truly have a fair chance of saving enough for their retirement.

Rich Smith of The Motley Fool wrote about a recent survey of financial services professionals that found that 39 percent of financial industry insiders “reported that their competitors are likely to have engaged in illegal or unethical activity in order to be successful.”

Smith said the survey also found that nearly one in four “believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful.” Nearly one in three said they felt “pressured by bonus or compensation plans to violate the law or engage in unethical conduct.”

“Needless to say, these numbers are a bit discouraging,” Smith wrote. “After all, these are the people to whom we entrust our money, our nest eggs, our life savings.”

In another study, also reported by Motley Fool, researchers at the business schools for Emory and Duke Universities found that “in any given period, about 20 percent of firms manage earnings to misrepresent their economic performance.”

The research team surveyed 169 chief financial officers and a great majority of them said that the reason to manage earnings was to “influence stock price.”

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